Lately, people have been talking about the “evil bankers.” The story goes: You’re doing good. You’re renting a place or buying a small place. They advance you a huge loan you can’t really afford. They also give you credit cards. Using this, you enslave yourself and lose everything.

While I will admit that the Federal Reserve’s printing of money and destroying it’s value is a crime, the other stuff cannot be laid at their feet.

You should be able to control yourself. You should know how much you can spend on a house (or anything else). A real estate agent tried to talk me into spending 28% of my salary on my house on the assumption I would earn more in the future. I spent around 22%. Now that I have increased my salary, I am able to buy gifts, trips, pay off the loan faster, or whatever I want. I recommend people buy a house on the lower salary of the husband and wife. That way, if either person loses their job, they’re still okay. Also, in the future, it gives the option for one parent to be a stay at home mom or dad, which helps in a child’s development. If neither want to do that, they can afford private school or anything else they want to do.

Most of us would never be able to own a house without debt. Could you imagine if you had to rent and save up to buy a house in cash? How long would it take? Bear in mind that lodging is usually the biggest expense for people. Using debt, you are paying the same amount each month for a house payment instead of rent. Also, if you got a fixed rate, the price will never change. Rent goes up. Your mortgage payment doesn’t.

If you are having trouble with debt, no matter what kind of debt it is, it is probably your own fault. There are some hard luck stories, but usually it’s lack of self-control. If you ask someone who is filing for bankruptcy due to consumer debt what they bought with their money, they probably couldn’t tell you. Most of it was a complete and total waste.

Debt is good. Same as guns. Same as drugs. They are only tools. Used properly, they can make life much better. Used incorrectly, and they can destroy everything.